Defense Tech is on a Tear!
Defense and dual-use texhnologies
Good morning,
Some big news throughout this week. Let’s start with the great news that the Defense Tech sector has had its best year with ~$3B invested into startups so far in 2024. This is despite seeing a slight downtick in the number of deals, showing that growth-stage funding in this market has proven resilient. Anduril has led the way with it's $1.5B round, followed by Helsing raising half a billion. There were also several large 9-digit raises including Saronic and last week’s announced raise by Chaos Industries.
Next, over the past few months it appeared there had been a bit of thaw between the U.S. and Chinese militaries as high-level talks had picked back up after several years. Well, that’s come to an abrupt end as China’s defense minister turned decided to cancel conversations with Secretary of Defense Austin, following Austin’s IndoPacific road trip. This comes on the heels of Xi’s aggressively worded caution to President Biden in Brazil last week to stay out of what China perceives to be its affairs (a Chinese Monroe Doctrine?).
Perhaps most notably, after President Biden greenlit Ukraine’s use of ATACMS missiles to strike into Russia, Putin has undertaken moves to try and intimidate NATO even more than usual. Reports of sabotage to undersea data cables in the Baltic Sea have led to the Danish Navy boarding a Chinese-flagged but Russian-manned ship allegedly responsible for the sabotage. Even more worrying, Russia has launched new ballistic missiles capable of reaching ICBM distances into Ukraine. Now, while these missiles did not carry nuclear warheads, they are capable of doing so. This was an attempt at sending a very clear message to the West in an attempt to reestablish some nuclear deterrence. That Putin feels this is necessary indicates that Russia is on the verge of catastrophe. He’s caught, unable to back down from a conflict that he cannot win without losing face and likely power at home. But let’s be very clear: Putin knows that if he launches a nuclear weapon, he will be destroyed.
Now, let’s dig in to the news!
News Headlines:
U.S. and Philippines sign pact on sharing intelligence and weapons technology (AP)
Secretary of Defense meets with Japanese, Australian counterparts to advance defense ties (DOD)
He also visited a Philippine base on the island of Palawan in a sign to Beijing (DN)
China's defense minister snubs U.S. meeting, breaking military talks (DN)
Ukraine fires U.S.-made longer-range missiles into Russia for the first time in the 1,001 day war (AP)
INDOPACOM chief sounds alarm on China's interest in invading Taiwan (S&S)
Defense & Dual-Use Technologies
Defense Tech hits new highs in 2024 in total investment while deal count is down (CB)
Defense tech startups have raised almost $3B in 2024 so far, a record (TC)
INDOPACOM is moving to a zero-trust architecture with a single partner-nation network (DO)
Admiral Paparo: Military challenges in the Pacific can't be solved with just drones (USNI)
Army Cyber AI monitoring tool, Panoptic Junction, moves to 12-month pilot (DS)
OMB proposes alternate funding plan for Virginia class attack subs (USNI)
DIU picks programmers to connect its Replicator drone swarms (DN)
Soldier creates device that speeds up Apache missile system rearming (MT)
Threat Tech
Russia fires ballistic missile capable of ICBM distances at Ukraine (AP)
Panel report on China's tech developments calls for U.S. action on space and AI (SN)
N. Korea's Lil' Kim calls for expanding his nuclear forces in the face of alleged U.S. threats (AP)
U.K. sanctions Iran Air and IRISL over military transfers to Russia (RT)
N. Korea blasts noise into South as a weapon (NYT)
Russia broadens its nuclear doctrine, allowing for first use and targeting non-direct belligerents; Pentagon hasn't seen a change in Russia's nuclear posture (DO)
Iran defies international pressure, increasing its stockpile of near weapons-grade uranium, UN says (AP)
Germany on mysterious broken cables in Baltic Sea: 'It is sabotage' (POL)
Danish navy reportedly boards Chinese ship suspected in European undersea cable sabotage (THW)
Foreign Defense Tech
European defense firms book double-digit growth amid Ukraine War (DN)
U.K.'s new SPEAR 3 mini cruise missile succeeds in first end-to-end test (TWZ)
Ukraine fires U.S.-supplied long range missiles into Russia: defense ministry (BBC)
U.S. to supply Ukraine with anti-personnel mines 'soon' (DN)
NATO drill sends divers, drones to sneak by underwater alarm sensors (DN)
EU approves first-ever funding for joint weapons, ammo procurement (DN)
Germany will stand up to Russian intimidation, says foreign minister (AP)
Defense Industry
Second Trump presidency could mean harder line with defense industry (DN)
Northrop delivers first Stand-In Attack Weapon (SiAW) test missile to the Air Force, enhancing the ability to overcome anti-access/area denial systems (TAV)
Dell, Iron Bow settle charges they overcharged the Army: DoJ (RT)
Lockheed partners with Iceye to advance AI-enabled targeting (SN)
Pentagon picks L3Harris to develop C2 prototype for autonomous swarms (TDP)
Autonomous Systems
To hit deep inside Russia, Ukraine has built its own drones (NPR)
Teal Drones emerges as winner of Army's Short Range Reconnaissance Program (WSJ)
Korean students build spider-inspired drone that can walk, perch, and fly (CNN)
Turkish strike drone completes first carrier landing, takeoff (DN)
Deal Flow:
Funds
Defense-focused middle market PE firm Enlightenment Capital closed its fifth fund at $825M (GCW)
VC
Advanced nuclear tech startup Radiant raised a $100M Series C led by DCVC for portable nuclear reactors (AX)
Drone manufacturer Skydio raised a $170M Series E extension at a $2.2B valuation led by KDDI and Axon (TC)
Portuguese AI-equipped drone startup Tekever raised a $73.7M round co-led by Baillie Gifford and the NATO Innovation Fund (TC)
PE / M&A
AeroVironment to acquire swarming and counter-drone company BlueHalo for $4.1B (DN)
German engineering conglomerate Thyssenkrupp plans to IPO its $1.6B naval shipbuilding unit within the next year (BBG)
Opportunities
DARPA's Strategic Tech Office has released its office-wide BAA covering a wide swath of research thrusts from AI to undersea tech to modeling and simulation to directed energy to space (SAM)
The Army has reissued its call for proposals for research on vehicle power & mobility, autonomy, cyber engineering, and more (SAM)
Editor's Picks:
Jerry McGinn is the just the latest of numerous people to echo what BoF has been saying for years: we need to revamp the DIB for speed and scale. To date, few beside BoF have offered viable approaches to do so.
We offered practical / tactical advice on how to update the DIB in several issues including these:
Lighter Side:
Keep Building,
BOF